Should we tap into equity even though our rates will go up?

[Kenzie McIlvoy]

My husband and I own two investment properties. One is a SF long term rental that has about $70K of equity. We have a short term rental that we’re doing a live in flip that will be ready early next year. Our short term rental has around $200K in equity and, market depending, will continue to grow by next year. We have two conventional loans with interest rates under 4%.

We are both in our 20’s and want to invest as much as possible in the next few years before starting a family. We’re also both fire fighters so we have the time to put our own work and time into our investments for now, specifically enjoying the short term rental space and would like to continue buying these properties.

My question is, does it still make sense to refinance? The numbers would make sense for the short term rental but would take away some cash flow. If we’re using the money to invest in another cash flowing property, wouldn’t that still make sense to pull our money out? The long term rental wouldn’t make as much sense with a refi because the property is only cash flowing about $200/month as is.

We’ve been hearing a lot about keeping money in your investments and reducing your leverage because of what’s happening and could happen with the market within the next few years. We want to be aggressive but we want to be smart.

Any thoughts or advice is very appreciated! Below is our lake house we have been working on and will be keeping as our first short term rental!